Home – New Forums Starting your journey Starting a small takeaway cafe shop soon – please need some advise. Reply To: Starting a small takeaway cafe shop soon – please need some advise.

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Gordon Akman, post: 19994 wrote:
Hi Ady,
Good luck working for yourself. Starting a business of your own and making a good living out of it is the most rewarding thing I have ever done.

Here is some information that I hope helps.

You have chosen a very competitive industry with low margins.

The hours will be long and the work often mentally tiring.

Choosing the right location and negotiating the best lease you can will be a critical factor determining whether your business is a success.

Be EXTREMELY DISCIPLINED with how you spend your start up money. One of the most common reasons I see for new businesses failing is they spend too much money early on: Rent; Equipment; Furniture etc.

Seek advice when buying your coffee machine. Go around other coffee shops and ask them for their advice about buying a coffee machine (obviously say you plan to open a coffee shop somewhere far away from their shop so they don’t think you will be competition).

If you sell meals make sure your menu is VERY SIMPLE. You do not want to be mucking around making food when you get really busy.

You may be able to sell your coffee for between $3-$4. Just think how many coffees you will have to sell just to pay your rent. You will notice successful coffee shops sell expensive high quality sides to coffee: cakes, cookies, pastries, juices etc. You may be able to sell these for between $3-$5 each. Your success at Up Selling customers these products will be key to determining whether your Coffee shop is profitable.

Negotiate the best deal with the cold drink suppliers you can. Coke or Pepsi etc will supply a full range of products. They will also supply the fridge. Also, there are some excellent fresh juice suppliers. These products are high quality and people will pay a premium for them (another chance to build some margin into your sales).

Create a loyalty program e.g. Customers get a card that gets stamped and get their 6th coffee free (make your offer reasonably generous or it will not work).

Think about your own coffee shop consumption patterns. 1. You go to a coffee shop close to your work. 2. The staff member is polite and the coffee is good. 3. You go everyday. 4. One day you get bad service or the coffee is bad. 5. The next day you go somewhere else and start back at step 1. DO NOT LET THIS BE THE EXPERIENCE FOR YOUR CUSTOMERS OR YOU WILL FAIL.

Keep things relatively simple. Focus on: Good value, Great Coffee/Food/Drinks, and Excellent Service.

Finally, one of the biggest reasons any type of Food/Beverage/Hospitality business fails is their owners think it is about them. It is THEIR Coffee shop. They are going to do things THEIR way. WRONG. It is your CUSTMOERS Coffee Shop. You sell products and provide service they want – not what you think is good/how things should be done.

Good luck.

Hi Gordon,

Thank you so much for your invaluable advice above, I am aware so many things to do when you setting up your own business from the scratch. I just have this idea that if someone want to be successful, they have to do it themselves from the scratch. I just do not like the idea having franchise with all those fees that at the end of the day only small percentage of profit left, looking at all the effort you have done to your business.

Just about your comment about going into this very competitive type of industry with low margins, I have also read articles that majority coffee shop businesses fail within the first year, this is something that makes my self doubt lately whether I still want to pursue it or look at another business within other type of industry.

I think the same principles I have go with the one you have mentioned above;

  • Location is always my priority of list when setting up this business
  • Sourcing quality equipment by shopping around to have the best quote
  • Simple Menu but quality with healthy choices
  • Sourcing quality coffee beans means good coffee to consume, not just selling “a coffee”
  • Always look happy, since customers do not want to buy something from a person who looks grumpy
  • High customer service level
  • Reward Program benefits customer but should not put the business in losing profit situation

I am totally agree with your last point that it is CUSTOMER’s Coffee Shop not MY Coffee Shop, at the end of the day, those who understands customer needs will survive and thrive.

I hope I could have more discussion with you further in regards of my situation. Once again thank you and really appreciate for your advice.

Kind Regards,